If you are currently enjoying your retirement years, or will be soon, there is a good chance that you will face the need for long-term care (LTC) for you, or a spouse, at some point down the road. If that time does come to pass, covering the cost of LTC may involve qualifying for Medi-Cal benefits. Medi-Cal is California’s version of the federal Medicaid program. Like many people, you may have heard stories about impoverished spouses that have you concerned about relying on Medi-Cal for help with your LTC expenses. While it was once the case that qualifying for Medi-Cal could leave a community spouse without enough assets to survive, the Medi-Cal Spousal Impoverishment rules can prevent that from happening. Let’s look at the 2020 Spousal Impoverishment Standards.
The Cost of Long-Term Care
In California the average cost of a year in a skilled nursing facility is over $120,000 in 2020. Unfortunately, neither Medicare nor most private health insurance policies will pay for that care. Medi-Cal (California’s version of Medicaid) does cover certain LTC expenses. The fact that Medi-Cal covers nursing home expenses is great news – as long as you qualify for benefits. As you may have heard, Medi-Cal eligibility is based, in part, on an applicant’s income and “countable resources.” Both limits are relatively low. As a senior on a fixed income, your income may not be an issue; however, your countable resources (assets) could be given that the limit for an individual is only $2,000. Assets such as your home and a vehicle are exempt from consideration; however, you could still find yourself over the limit. Of even greater concern is the impact your efforts to qualify for Medi-Cal will have on your community spouse (a spouse that is not in LTC).
Certain Medi-Cal income and resource standards are adjusted beginning each January in accordance with changes in the SSI federal benefit rate (FBR) and the Consumer Price Index (CPI). Many states offer, for example, categorical eligibility to individuals who are not receiving SSI but who meet the financial eligibility requirements of the program, as authorized by 1902(a)(10)(A)(ii)(I) of the Social Security Act (“the Act”). Similarly, most states have adopted the “special income level” institutional eligibility category authorized under Section 1902(a)(10)(A)(ii)(V) of the Act, the maximum income standard for which is 300% of the SSI FBR. Additionally, certain eligibility standards relating to coverage of long-term services and supports, including the home equity limitation in Section 1917(f) of the Act and elements of the spousal impoverishment statute in Section 1924, are increased each year based on increases in the CPI for All Urban Consumers (CPI-U).
2020 Spousal Impoverishment Standards
According to the figures released for 2020 by the federal government, a “community spouse” may keep as much as $128,640 without jeopardizing the Medi-Cal eligibility of the spouse who is receiving long-term care. Known as the community spouse resource allowance or CSRA, this is the most that a state may allow a community spouse to retain without a hearing or a court order.
In addition, the maximum monthly maintenance needs allowance (MMMNA) for 2020 is $3,216. This is the most in monthly income that a community spouse is allowed to have if his/her own income is not enough to live on and he/she needs some or all of the institutionalized spouse’s income.
Please download our FREE estate planning checklist. If you have additional questions or concerns about the Medi-Cal Spousal Impoverishment Standards, contact us at the Northern California Center for Estate Planning & Elder Law by calling (916)-437-3500 or by filling out our online contact form.